But that scenario is changing. New options are in place for retirees who want to downsize but still need a mortgage, and for people who'd hoped to age in place with a smaller refinanced loan.

Fannie Mae and Freddie Mac, the government-sponsored mortgage investment giants, announced recent policy changes that allow lenders to take retirees' assets into account. So when loan officers calculate borrowers' income eligibility, they can factor in IRA, 401(k) and other retirement assets as a supplement to their fixed income.

"This could open up the door for more older borrowers who want a conforming, conventional mortgage," says Freddie Mac spokesman Brad German.

Retiree Jim Eberle can only hope. He's paid off eight mortgages during his lifetime, yet for the last year he's been unable to find a lender willing to refinance his current mortgage. At age 70, Eberle has accumulated considerable assets over the years — enough, even, to pay off his suburban Washington, D.C., single-family home outright. But lenders weren't looking at retirement savings to determine whether Eberle had the ability to pay a mortgage. They were focused on income and credit scores to assess risk.

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Eberle's credit was sterling, but his monthly $2,400 Social Security benefit was deemed too small to qualify for a refinanced mortgage. "The bank said I didn't have enough money coming in, essentially," he says. "I had substantial investments in the stock market, but that wasn't good enough." He wasn't willing to tap his 401(k) or cash in other investments to pay off his mortgage.

Now he's waiting to hear back from another lender.

Most banks don't want housing expenses — mortgage payments, taxes and insurance — to take up more than 28 percent to 32 percent of a borrower's gross income. That may not be a problem for working couples. But it's a challenge for retirees whose fixed incomes don't meet underwriting requirements.

The new rules, however, just might make all the difference — if you can find a loan officer who's willing to do the necessary legwork. Jeff Lipes, a past president of the Connecticut Mortgage Bankers Association, says the new calculations to boost retirees' eligibility go like this: Let's say a retiree has $1 million in an IRA or 401(k) and wants a 30-year fixed-rate mortgage. Lenders calculate 70 percent of that $1 million (the balance is reduced by 30 percent to account for market volatility; no rate of return is assumed). They divide that $700,000 (that's 70 percent of $1 million) by the term of the loan (such as 360 payments for a 30-year mortgage).